University of Texas at Austin President Bill Powers was given an ultimatum Friday: quit or be fired, a source with knowledge of the situation said. (AP File Photo/Austin American-Statesman, Ricardo Brazziell)

Photo: Ricardo Brazziell, Associated Press

University of Texas at Austin President Bill Powers was given an...

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University of Texas at Austin President Bill Powers was given an ultimatum Friday: quit or be fired, a source with knowledge of the situation said. (AP File Photo/Jack Plunkett)

Photo: Jack Plunkett, FRE

University of Texas at Austin President Bill Powers was given an...

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University of Texas President Bill Powers, left, welcomes head football coach Charlie Strong during a press conference at the campus in Austin, Monday, Jan. 6, 2014. Strong, 53, formerly University of Louisville coach, took the job Sunday night replacing Mack Brown.

Photo: Jerry Lara, San Antonio Express-News

University of Texas President Bill Powers, left, welcomes head...

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AUSTIN, TX - DECEMBER 15: University of Texas Athletic Director Steve Patterson (R) and President Bill Powers answer questions regarding the resignation of football coach Mack Brown on December 15, 2013 in Austin, Texas. Moments earlier, Brown announced he will step down as coach after the Valero Alamo Bowl game against Oregon on December 30.

UT System Chancellor Francisco Cigarroa asked Powers to resign before the regents meet again July 10, or be fired at the meeting, the source said. Powers told Cigarroa he will not resign, at least not under the terms that the chancellor laid out Friday. Powers told Cigarroa he would be open to discussing a timeline for his exit, the source said.

Powers has developed a tense relationship with the system chancellor and regents in recent months. The ultimatum comes as the university plans to undertake an official investigation into possible legislative influence over campus admissions. Allegations of undue influence, including the admission of family and friends of legislators otherwise not qualified, were heavily publicized by UT System Regent Wallace Hall. A House committee is drafting articles of impeachment for Hall based on his massive records requests and alleged bullying of university officials in his quest to unveil wrongdoing at the flagship.

The regents meet Thursday. The agenda for the meeting has not yet been posted.